Basing morality on who you perceive as more powerful is not really morality at all.I would agree that there is definitely an ethnic/religious element in the conflict. But, the land is the central part of the conflict, and the biggest issue is there are still extreme people on both sides that want the whole thing for themselves, which isn't ever going to happen. Reasonable people can live with others that are different from them.
Imagine if a group different from you kicked you out of your house or killed you or your family members, took over America, didn't give you anywhere to go in the country if you survived, and continued treating you like crap when you tried to exist, and denied you basic human rights. You would hate their guts, as you should.
I think if you are trying to pick which side is "better," you might as well be pissing up a rope. They both need to grow up and learn to share. I expect more out of Israel since they have more resources and power.
Would it make you more empathetic towards Israel if more of their citizens died to even the score?